A Sustainable Development Strategy for the Uzbekistan Textile Industry: the Results of a SWOT-AHP Analysis

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Article A Sustainable Development Strategy for the Uzbekistan Textile Industry: The Results of a SWOT-AHP Analysis

Yong-Jeong Kim 1 and Jaehun Park 2,* 1 GSM, Graduate School of Business, Sogang University, Seoul 04107, Korea 2 Major in Industrial & Quality Engineering, Daegu Haany University, Gyeongsangbuk-do 38610, Korea * Correspondence: [email protected]; Tel.: +82-53-819-7723

Received: 5 July 2019; Accepted: 21 August 2019; Published: 24 August 2019

Abstract: Uzbekistan is paying great attention to the textile industry as an industry offering a traditional production advantage, coming to the conclusion that it is necessary to establish and implement effective policies. In Uzbekistan as in other developing countries, whereas there are many strategic directions and development strategies to be considered for key industries, investment resources are limited. Therefore, it is necessary to prioritize and to apply limited resources accordingly. Even though research on the textile industry in Uzbekistan is ongoing for a long time, most of the resultant literature concerns only general industrial trends and pertinent investment and advancement strategies. The present study examined sustainable, concrete, and effective development strategy directions for the Uzbekistan textile industry using strengths, weaknesses, opportunities, and threats (SWOT) analytic hierarchy process (AHP) model. The SWOT-AHP model was tested in a case study on Uzbekistan’s textile industry. In the case study, the results were presented in an illustrative way by utilizing the quantitative information achieved by the model. The results indicated that the weakness and opportunity (WO) strategy had the highest importance, and suggested accordingly that priority should be given to that strategy for Uzbekistan’s textile industry development. The results further suggested that the Uzbekistan government should endeavor to upgrade obsolescent technology and solve the problems of high-priced imported raw materials and workers’ low education level, which are weak points of the textile industry of that country. Also, Uzbekistan should gradually shift the industrial structure from raw cotton to finished textile exportation, which offers relatively high added economic value. To achieve this, the Uzbek government needs to promote joint ventures and strategic alliances with foreign companies wishing to enter the textile industry through foreign direct investment (FDI) schemes.

Keywords: textile industry; SWOT; AHP; decision analysis

1. Introduction According to the Korea Trade Investment Promotion Agency (KOTRA), agriculture, one of the largest segments of Uzbekistan’s economy, accounts for one-ﬁfth of total gross domestic product (GDP) [1]. In contrast to the remarkable contraction of the agricultural economy of most Commonwealth of Independent States (CIS) countries in past years, agricultural production in Uzbekistan grew greatly every year since the 2000 implementation of a strong agricultural development policy that includes, among other initiatives, an agricultural land improvement project to expand both cultivation area and irrigation facilities. Uzbekistan produces three million tons of cotton per year, of which 1–1.1 million tons is processed as cotton yarn. In addition, Uzbekistan is the sixth largest cotton producer and the ﬁfth largest cotton exporter in the world, showing a well-developed structure concentrated on cotton, which gives it its high percentage of the international cotton market.

Sustainability 2019, 11, 4613; doi:10.3390/su11174613 www.mdpi.com/journal/sustainability Sustainability 2019, 11, 4613 2 of 22

Textile production in recent decades increasingly moved from Europe and the United States to Southeast Asia, Central Asia, and South America. Among Central-Asian states, Uzbekistan is a major exporter of cotton fiber. Due to the expiration of the Multi Fiber Agreement (MFA) and the consequent cancellation of world quotas in 2005, competition in the world market became increasingly fierce. As a result, only those producers who supply high-quality products at a low cost can emerge as winners [2]. Against this backdrop, developing countries are doing everything they can to attract foreign technologies and investors while searching for their niche in the global market. The gains from attracting foreign investors are surely considerable for those countries that invested a lot in improving their textile industries [3]. Consequently, the Uzbekistan government is actively instituting programs to attract foreign investments into the textile industry. The principal intention of attracting foreign direct investment (FDI) in the textile sector is to engage foreign companies that are capable of producing high-quality, value-added products that use high-grade cotton fiber made in Uzbekistan. Uzbekistan’s textile industry, as one of its most key national industries, has an important role to play in the development of the country’s economy. Since the textile industry’s profits lead to deepening and broadening of the national manufacturing system overall, its transformation from cotton exportation to manufacturing of goods will enhance the national economy’s capacity to insulate itself from instability in the commodities market [4]. The textile industry can also certainly alleviate the problems of unemployment and poverty in Uzbekistan by employing sizable numbers of under-skilled labor, especially from rural areas, and women [5]. Thus, the Uzbekistan government paid great attention to the textile industry and established sustainable development plans for its improvement. Additionally, it is making efforts to attract foreign investment and is pursuing privatization and private investment to accelerate the development of the textile industry by utilizing the benefits of rich cotton and cotton yarn, cheap labor and infrastructure resources (i.e., water, natural gas, electricity, etc.), and its domestic market (the largest population in Central Asia). Uzbekistan’s main products such as fabrics, textiles, and yarns steadily increased in production, although most of the production facilities are concentrated on the spinning process, to the detriment of knitting, dyeing, and processing, not to mention the garment-sewing sectors. Specifically, as of 2016, the textile industry produces 550,000 tons of cotton, about 480 million m2 of fabric, about 100,000 tons of stockinet, 411 million garments, and 85 million pairs of hosiery [6]. The quality of cotton is somewhat lower than that of Sea Island cotton and Egyptian cotton in the West Indies system of the Bahamas, but it is considered to be superior to those of major competitors such as China, India, and Pakistan. It also has an advantage over India and Pakistan in terms of export competitiveness [1]. A number of studies on general textile industry trends and investment strategies for Uzbekistan were conducted. Some of them utilized strengths, weaknesses, opportunities, and threats (SWOT) analysis and suggested macroeconomic development directions and strategies for the Uzbekistan textile industry. SWOT analysis is a commonly used tool for analyzing internal and external environments in order to attain a systematic approach and support for a decision situation [7]. The internal and external factors deemed most important to an enterprise’s future, referred to as strategic factors, are summarized within the analysis. The final goal of a strategic planning process, of which SWOT is an early stage, is the development and adoption of a strategy that produces a good fit between internal and external factors. SWOT also can be used when a strategy alternative emerges suddenly and the decision context relevant to it has to be analyzed. However, conventional SWOT analysis has a disadvantage, which is the difficulty of measuring the priorities and importance of derived factors; as such, utilization of SWOT analysis is limited to the identification of sustainable and effective development strategies. As pointed out in Kurttila et al. [8], SWOT analysis provides no means of analytically determining the importance of factors or of assessing the fit between factors and decision alternatives, and it is regarded as a limitation of SWOT analysis application. In other words, the conventional studies on general textile industry trends and investment strategies for Uzbekistan using SWOT analysis are primary approaches for establishing strategies based on the strategy factors and do not provide qualitative examinations such as priority and importance among strategy factors. Sustainability 2019, 11, 4613 3 of 22

As concluded by Hill and Westbrook [9], SWOT analysis results are too often superficial and imprecise listings or incomplete qualitative examinations of internal and external factors. The further utilization of SWOT is, thus, based mainly on qualitative analysis, as well as the capabilities and expertise of the persons participating in the planning process. The objective of this study was to investigate SWOT factors more systematically in order to improve the quantitative information basis of any proposed strategic directions for the Uzbekistan textile industry. This research suggests, based on its SWOT analytic hierarchy process (AHP) analysis, sustainable and effective development strategies for the Uzbekistan textile industry. For the SWOT-AHP analysis, SWOT provided the basic framework within which to perform the analysis of the decision situation in the Uzbekistan textile industry, and the analytic hierarchy process (AHP) analysis assisted in enabling the SWOT analysis to be carried out more analytically, specifically by determining the priorities for the factors included in the SWOT analysis and making them commensurable. The AHP enables decision-makers to represent the simultaneous interaction of many factors in a complex, unstructured situation. It helps them to identify and set priorities on the basis of their objectives and their knowledge and experience of each problem [10]. In order to apply the SWOT-AHP analysis to the Uzbekistan textile industry, we firstly took a look at the SWOT-analysis-based research that was carried out in broadly examining the textile industry in Uzbekistan. Then, the SWOT matrix for the Uzbekistan textile industry development strategy was established by integrating, classifying, and adjusting the SWOT analysis results derived from the previous studies. The AHP analysis was used to quantify the importance and priority of the components of the SWOT analysis. In particular, in order to increase the validity and effectiveness of the research by duplicating the questionnaire to the same company, we surveyed 75 textile companies in Uzbekistan by contacting experts in each company to collect data for the AHP analysis. On this basis, we were able to provide concrete, effective, and sustainable strategy directions reflective of rational selection and prioritization within a context of limited resources. The main advantage of the proposed approach and the difference from the other relevant research lies in the quantitative examination of the SWOT factors by applying AHP in SWOT analysis and the inclusion of the preferences of the decision-maker in planning and implementing the development strategies. The rest of this paper is organized as follows: Section2 reviews the precedent research on the textile industry in Uzbekistan and demonstrates the construction of the SWOT matrix. Section3 explains the present research design and analysis methods. Section4 discusses the AHP analysis results and strategy alternatives. Section5 summarizes our work.

2. Background Research

2.1. Literature Review and SWOT Matrix Composition The literature review consists of two parts: general studies on the textile industry in Uzbekistan and SWOT-analysis-based development strategies for Uzbekistan’s textile industry. Several studies on the textile industry in Uzbekistan were conducted. Davronov [11] and Nargiza [12] examined the export and market potential of the Uzbek textile industry. They argued that the textile industry plays an important role not only in producing non-food consumer goods but also in fulfilling a social need in promoting the creation of new jobs. Djanibekov et al. [13] analyzed the pros and cons of Uzbek cotton, and emphasized that the production of cotton is a strategic centerpiece of the economy of Uzbekistan, which ranks second among world cotton exporters. As noted in Rudenko [14], according to historical evidence, cotton was cultivated in what is now Uzbekistan since the fifth or sixth century. Maurizio et al. [3] explored cotton taxation in Uzbekistan. Based on several calculation methods, they concluded that Uzbek cotton is too heavily taxed. Ergashxodjaeva et al. [15] focused on an evaluation of the textile clothing sector and clustering capabilities in Uzbekistan. They determined that the development of the light industry goods market depends primarily on the overall competitive environment in the industry and the factors that shape it. Mamadiev [16] investigated the strengths and weaknesses of the textile industry in Uzbekistan. He mainly provided specific data on the textile industry and Sustainability 2019, 11, 4613 4 of 22 provided a descriptive analysis of each factor. He came to the conclusion that the following problems hinder textile industry development: outdated technology, a low utilization ratio, a high tax burden, an unstable financial situation for enterprises, the absence of financial incentives between farmers and cotton-fiber-producing plants, and a lack of FDI. Revetria et al. [17] focused on the necessity of rationally employing existing capacities and resources and the significance of the textile industry (and light industries generally) to the national economy. Also, some of the aspects of developmental strategies were discussed, and aspects of foreign countries’ advantages were analyzed. Furthermore, institutional, production, and technical capabilities for further development were identified, and the effective use of present resources, as well as key means of stimulating productivity, was identified. Several studies applied SWOT analysis to suggest development strategies for Uzbekistan’s textile industry. Based on our review of this literature, we established a SWOT matrix by classifying, organizing, and integrating the SWOT factors identified in those studies. In Knowledge Sharing Programs funded by KORTA and the Korea Development Institute (KDI), Uzbekistan and South Korea discuss all relevant economic areas such as special economic zones, public policy, and industrial development strategies. Especially, in Knowledge Sharing Programs held in 2016 and 2017, SWOT analysis and comparative analysis were utilized to suggest development strategies for Uzbekistan’s textile industry [4]. The strengths of Uzbekistan’s textile industry lie in its rich materials (raw cotton and cotton yarns), cheap labor, low-cost energy sources such as electricity and gas, a large domestic market (32 million consumers), access to the CIS and European markets, duty exemptions and tax benefits for raw materials, and an organization that can implement strong textile policies. The drawbacks of Uzbekistan’s textile industry include its weak basis for chemical fibers, which are essential given the recent trend toward functional textiles in the global market, and its relatively low-tech and obsolescent manufacturing base focusing on the exportation of cheap, general-purpose articles. Other issues include weaknesses in the logistics environment in terms of duration and cost due to its inland location, government control and lack of cooperation among branches, lack of water and low mechanization rate in the cotton industry, and a dependency on importation of materials due to the unavailability of local materials for apparel production. Opportunity factors include expansion of new fashion trends through global sourcing, production with buyer compliance, possible growth of the high-potential CIS market, entry to the Eurasia Economic Cooperation, and the United States of America (USA)’s regulations on Chinese exports. Threats include environmental policies and CSR reinforcement in advanced countries, technical subordination by advanced countries, and mid-to-low-price market encroachment from China and Vietnam. Tursunov [18] investigated a development strategy for the textile industry by means of a SWOT analysis. The textile industry in Uzbekistan has a high but thus far unrealized potential. It has considerable competitive advantages both in the domestic and international markets through the possessing of local raw materials. The high potential of textile industry development, in fact, could be one of the “growth points” for the entire national economy. However, government policy prioritizing exportation of cotton fiber, along with minimization of its processing and exportation of ready-made products, leads to considerable risk for the national economy due to instability of world prices for cotton fiber, especially during periods of their sharply falling prices. Textile and garment suppliers from Uzbekistan have advantages and disadvantages in the market. Their main advantage is the existence of a raw material base in Uzbekistan, especially high-quality cotton, which gives an opportunity for further development and expansion of textile manufacturing. Uzbekistan produces more than one million tons of cotton fiber per year, but only a fraction of that is used by domestic textile enterprises. The proximity of raw materials sharply reduces transport costs and time for delivery to enterprises. A no less important advantage is Uzbekistan’s labor cost, which is cheaper than in rival countries. The literacy rate in Uzbekistan is almost universal at 98%, and workers are generally well educated and trained. Even though most local technical and managerial training does not meet international business standards, foreign companies engaged in production report that Uzbek workers learn quickly and work effectively. Furthermore, as Uzbekistan leases crude oil and natural gas, it has some advantage in resource costs over rival countries such as Sustainability 2019, 11, 4613 5 of 22

China and Turkey. As for the cost of water in Uzbekistan, while water use in the textile industry is not so extensive, the relatively low water price affords some additional competitive advantages to the industry. Tillyakhodjaev [19] provided marketing strategic planning for an Uzbek textile and clothing supply chain by SWOT analysis. The author recommended that the textile and clothing supply chain be segmented into high- and low-profit steps: retailers and brands should keep high-profit steps such as innovation, marketing, and retailing, while low-profit steps, such as sourcing raw materials, production and assembly, finishing, and packing, should be outsourced to mid-chain suppliers and low-cost producers worldwide. Indeed, global supply chains established labor-intensive exports from low-cost locations, especially Far East regions. The result was enormous growth in the number of producers and, thus, increasing competition. The SWOT analysis results of the abovementioned studies are summarized in Tables A1–A4 (AppendixA).

2.2. Concept of AHP Analysis and Outline for Applying AHP in SWOT Analysis AHP is the decision-making methodology which reflects the experiences and intuition of respondents through pairwise comparison of the factors forming the hierarchical structure in decision-making. It creates a pairwise comparison matrix, utilizes the eigenvalue method from its matrix, and estimates priority vector per a hierarchy. Numerical techniques are used to derive quantitative values from the verbal comparisons. The advantages of AHP include its ability to make both qualitative and quantitative decision attributes commensurable, and its flexibility with regard to the setting of objectives. Subjective preferences, expert knowledge, and objective information can all be included in the same decision analysis. To solve the matters concerning the decision-making and judgment of importance of the experts, the AHP analysis has to go through four steps of process: (1) establishing the hierarchical model with factors; (2) conducting pairwise comparison among factors; (3) calculating the relative weighted value of factors; and (4) integrating the relative weighted value in evaluating factors. In the first step, a matrix with pairwise comparison sub-hierarchy factors using nine scales is established. If the number of components in the hierarchy is n, the number of pairs occurring in the pairwise comparison is n(n 1)/2. If the importance is defined as va by pairwise comparison of − n factors composed in one hierarchy, rab and va in the pairwise comparison matrix are calculated as rab = va/vb (a, b = 1, 2, 3, ... , n). Only the most important concepts of the AHP theory are presented here. For more details on the AHP analysis, readers are referred to References [10,20]. Basically, the results of an AHP analysis are the overall priorities of decision alternatives. The basic concept in utilizing AHP within a SWOT analysis is to systematically evaluate SWOT factors and commensurate their intensities. AHP’s advantages, i.e., a systematic approach to decision problems and commensurateness, can be regarded as valuable characteristics in SWOT analysis. Additional value from a SWOT analysis can be achieved by performing pairwise comparisons between SWOT factors and analyzing them by means of the eigenvalue technique as applied in AHP. This offers a good basis for examining the present or anticipated situation, or a new strategy alternative, more comprehensively. After carrying out these comparisons, decision-makers will have new quantitative information about the decision-making situation, for example, whether there is a specific weakness requiring all the attention, or if the company is expected to be faced with future threats exceeding the company’s combined opportunities.

3. Research Design The research design proceeds in two steps: (1) SWOT matrix composition; (2) SWOT-AHP analysis and sustainable development strategy suggestions. The first step, SWOT matrix composition, analyzes the previous studies on SWOT analysis for the textile industry of Uzbekistan, and extracts their SWOT factors for SWOT analysis a little more widely. The extracted SWOT factors are refined through deduplication, classification, and consolidation and grouped into four SWOT groups: strengths, weaknesses, opportunities, and threats, in order to Sustainability 2019, 11, 4613 6 of 22 compose the SWOT matrix. in particular, brainstorming and consultation with experts working in theSustainability textile industry, 2019, 11, x academia, FOR PEER REVIEW and related organizations in Uzbekistan was conducted to ensure6 of 21 the validity of the SWOT matrix. expertsThe second working step, in SWOT-AHPthe textile industry, analysis andacademia sustainable, and related development organizations strategy in suggestions, Uzbekistan applieswas pairwiseconducted comparisons to ensure tothe capture validity the of the weights SWOT of matrix. each SWOT group, and derives the relative priorities of eachThe factor second within step, the SWOT-AHP SWOT group analysis by applying and su AHP.stainable Based development on the result strategy of the AHPsuggestions, analysis, applies pairwise comparisons to capture the weights of each SWOT group, and derives the relative we suggest analytical and sustainable development strategies in terms of four strategy divisions: priorities of each factor within the SWOT group by applying AHP. Based on the result of the AHP strength opportunity (SO), strength threat (ST), weakness opportunity (WO), and weakness threat analysis, we suggest analytical and sustainable development strategies in terms of four strategy (WT), according to the priorities of SWOT groups and factors. divisions: strength opportunity (SO), strength threat (ST), weakness opportunity (WO), and The AHP is a mathematical method developed by Saaty [20,21] for analysis of complex decision weakness threat (WT), according to the priorities of SWOT groups and factors. problemsThe with AHP multiple is a mathematical criteria. method The AHP developed is basically by Saaty a general [20,21] theory for analysis of measurement of complex decision based on someproblems mathematical with multiple and psychological criteria. The foundations,AHP is basically and ita cangeneral deal theory with qualitative of measurement attributes, based as on well assome quantitative mathematical ones. and The psychological results of an foundations, AHP analysis and are it can the deal overall with (global)qualitative priorities attributes, of as decision well alternatives.as quantitative The ones. idea The of utilizing results of AHP an AHP within analysis a SWOT are the framework overall (global) is to systematically priorities of decision evaluate SWOTalternatives. factors andThe determineidea of utilizing their intensities. AHP within The a advantagesSWOT framework of AHP is application to systematically can be regardedevaluate as valuableSWOT characteristicsfactors and determine of SWOT their analysis. intensities. Additional The advantages value from of AHP a SWOT application analysis can can be be regarded achieved byas performing valuable characteristics pairwise comparisons of SWOT analysis. between Additional SWOT factors value from and a analyzing SWOT analysis them can by be means achieved of the eigenvalueby performing technique pairwise as appliedcomparisons in AHP. between This SWOT offers factors a good and basis analyzing for examining them by means the present of the or anticipatedeigenvalue situation, technique or as a newapplied strategy in AHP. alternative, This offers more a comprehensively.good basis for examining After carrying the present out theseor comparisons,anticipated situation, decision-makers or a new willstrategy have alternative, new quantitative more comprehensively. information about After the carrying decision-making out these situation,comparisons, for example, decision-makers whether will there have is a new specific quantitative weakness information requiring completeabout the attention,decision-making or if the companysituation, is expectedfor example, to bewhether faced withthere future is a specific threats weakness exceeding requiring its combined complete opportunities. attention, or Another if the examplecompany is thatis expected when it to is be observed faced with that future one singlethreats weaknessexceeding isits largercombined than opportunities. all of the strengths, Another the strategyexample chosen is that could when perhapsit is observed be aimed that one at eliminating single weakness this weakness.is larger than Similarly, all of the choosingstrengths,a the new strategy chosen could perhaps be aimed at eliminating this weakness. Similarly, choosing a new strategy should probably not be based merely on opportunities and omitting existing threats if they strategy should probably not be based merely on opportunities and omitting existing threats if they are of same magnitude. are of same magnitude. The present SWOT-AHP analysis proceeded in three stages as shown in Figure1. The first stage The present SWOT-AHP analysis proceeded in three stages as shown in Figure 1. The first stage established development strategies for the Uzbekistan textile industry, the second stage set four SWOT established development strategies for the Uzbekistan textile industry, the second stage set four groups,SWOT and groups, the third and stagethe third set fourstage factors set four for factors each for SWOT each group SWOT (16 group factors (16 infactors total). in Prior total). to Prior the AHPto analysis,the AHP aquestionnaire-based analysis, a questionnaire-based survey of expertssurvey of from experts Uzbekistan from Uzbekistan textile companies textile companies was conducted was byconducted meeting the by experts meeting directly the experts and collectingdirectly and survey collecting data fromsurvey them data to from increase them the to e ffincreaseectiveness the of theeffectiveness AHP analysis. of the Based AHP on analysis. the survey Based results, on the wesurv analyzedey results, the we importance analyzed the (weight) importance of each (weight) SWOT groupof each and SWOT derived group the and relative derived priorities the relative of each prioriti factores of within each thefactor SWOT within group the SWOT only forgroup data only with a consistencyfor data with ratio a consistency (CR) of 0.1 ratio or less.(CR) Asof 0.1 a resultor less. of As the a AHP,result priorityof the AHP, was priority assigned was based assigned on the importancebased on the of SWOT importance factors, of SWOT and a concretefactors, and and a ecoffncreteective and development effective development strategy for eachstrategy type for and each size of Uzbektype and textile size of company Uzbek textile was presented.company was presented.

FigureFigure 1. Three 1. Three stage stage of the of strengths, the strengths, weaknesses, weaknesses, opportunities, opportunities, and threatsand threats (SWOT) (SWOT) analytic analytic hierarchy process (AHP) analysishierarchy and process number (AHP) of factors analysis in eachand number stage. of factors in each stage. Since the questionnaire-based survey was conducted to obtain priorities of factors within each Since the questionnaire-based survey was conducted to obtain priorities of factors within each SWOTSWOT group group through through AHP AHP analysis, analysis, the the question question configuration configuration followed followed the the principles principles of of Reference Reference [10 ], the[10], developer the developer of AHP of analysis. AHP analysis. The crux The of crux the matterof the matter in the questionin the question configuration configuration is the numberis the ofnumber factors forof performingfactors for performing pairwise comparisonspairwise comparisons in each SWOT in each group, SWOT because group, abecause large number a large of number of comparison factors makes it difficult for the respondent to maintain concentration. Given that Saaty [10] emphasized that the number of pairwise comparison elements should not exceed a Sustainability 2019, 11, 4613 7 of 22 comparison factors makes it difficult for the respondent to maintain concentration. Given that Saaty [10] emphasized that the number of pairwise comparison elements should not exceed a maximum of 7 2, ± the number in this study was six (= 4(4 1)/2), because the SWOT-AHP matrix consisted of four SWOT − groups and each group contained four factors, as shown in Figure1. Therefore, the questionnaire for SWOT-AHP analysis consisted of 30 pairwise comparison questions (= 6 5 pairs of five matrices); × that is, the evaluation was performed five times for six pairwise comparisons in the questionnaire. In general, in the questionnaire configuration for the AHP analysis, when the number of questions is large, the respondent’s input can be increased and their concentration decreased, so that it becomes difficult to maintain consistency of responses. The questionnaire of this study evaluated the relative importance on a nine-point scale, which was proven to be the most useful for AHP analysis (Saaty, 2007). Table1 shows the combinations of pairwise comparisons of the questionnaires as evaluated on the nine-point scale.

Table 1. Combinations of pairwise comparisons in stages 2 and 3. SWOT—strengths, weaknesses, opportunities, and threats.

Stages Combinations of Pairwise Comparisons Stage 2 (S : W), (S : O), (S : T), (W : O), (W : T), (O : T) (6 comparison questions)

(S1, S2), (S1, S3), (S1, S4), (S2, S3), (S2, S4), (S3, S4)

Stage 3 (W1, W2), (W1, W3), (W1, W4), (W2, W3), (W2, W4), (W3, W4) (24 comparison questions) (O1, O2), (O1, O3), (O1, O4), (O2, O3), (O2, O4), (O3, O4)

(T1, T2), (T1, T3), (T1, T4), (T2, T3), (T2, T4), (T3, T4)

4. Empirical Analysis and Sustainable Development Strategies Proposal

4.1. SWOT Matrix Composition The procedure of the SWOT analysis consisted of (1) identifying opportunities and treats as the external environment part, (2) identifying strengths and weaknesses as the internal environment part, and (3) composing a SWOT matrix by classifying the factors for the opportunity, threat, strength, and weakness groups in the external and internal environment parts. The SWOT matrix for the analysis of the Uzbekistan textile industry was composed by extracting the SWOT factors for each SWOT group from the previous studies on SWOT analyses of the textile industry in Uzbekistan, the factors of which are summarized in Tables A1–A4 (AppendixA). As aggregated, integrated, and classified from Tables A1–A4 (AppendixA), the SWOT factors are summarized in Table A5 (AppendixB). In that Tables A6 and A7 (AppendixC), note that we classified the SWOT factors that appeared three times or more, and determined the final factors to be applied to this study through three rounds of expert discussions and adjustment processes, thereby deriving the SWOT matrix shown in Table2.

Table 2. SWOT matrix for Uzbekistan textile industry.

S (Strength) W (Weakness) Cheap highly skilled labor cost People are undereducated • • Low utility prices and cheap raw materials Low technical level • • Government support, beneﬁts, and incentives Imported materials are expensive • • Advantages in strategic proximity to huge market Weaknesses in logistics environment • • O (Opportunity) T (Threat) Development of manufactured textile goods instead Fashion market with rapid design change • • of cotton ﬁber Growing competition because of new entrants to the industry • Possible growth of foreign market Reduction of Uzbekistan’s major • • Expansion of new fashion trends textile-product-importing countries • Favorable conditions for foreign investments Growing requirement for trade in advanced countries • • Sustainability 2019, 11, 4613 8 of 22 Sustainability 2019, 11, x FOR PEER REVIEW 8 of 21

4.2.4.2. SWOT-AHP SWOT-AHP Analysis Analysis ForFor the the AHP AHP analysis, analysis, we we composed composed the the three-stage three-stage hierarchy hierarchy SWOT-AHP SWOT-AHP model model shown shown in in FigureFigure2. The2. The ﬁrst first stage stage was was the the ultimate ultimate goal goal of establishingof establishing the the development development strategies strategies for for the the UzbekistanUzbekistan textile textile industry, industry, and and the the second second stage stage was was composed composed of of the the four four groups groups of of the the SWOT SWOT matrix:matrix: strengths, strengths, weaknesses, weaknesses, opportunities, opportunities, and and threats. threats. The The third third stage stage was was composed composed of of 16 16 factors, factors, whichwhich are are the the four four factors factors for for each each SWOT SWOT group. group.

FigureFigure 2. Hierarchy2. Hierarchy SWOT-AHP SWOT-AHP analysis analysis model. model.

TheThe questionnaire-based questionnaire-based survey, survey, which which consisted consisted of of 30 30 pairwise pairwise comparison comparison questions, questions, was was conductedconducted for thefor SWOT-AHPthe SWOT-AHP analysis. analysis. To maintain To maintain the consistency the consistency of the survey of results,the survey we distributed results, we 100distributed questionnaires 100 toquestionnaires experts such as to managers experts andsuch executives as managers in textile and companiesexecutives located in textile in 12 companies regions of Uzbekistanlocated in 12 including regions Tashkent,of Uzbekistan from including 23 July to 25Tashkent, August from 2018. 23 The July textile to 25 companies August 2018. were The divided textile intocompanies three groups: were foreign, divided joint into venture, three groups: and local. foreign, Most joint of the venture, survey and respondents local. Most had of more the thansurvey 20respondents years of experience had more in thethan textile 20 years industry. of experience Seventy-ﬁve in the of thetextile 100 industry. questionnaires Seventy-five were collected, of the 100 andquestionnaires 73 with a consistency were collected, ratio of and 0.1 73 or with less a were consistency used for ratio the surveyof 0.1 or analysis less were to used maintain for the logical survey consistency.analysis to The maintain consistency logical test resultsconsistency. and the The types consistency of survey respondent test results companies and the are types summarized of survey inrespondent Tables A1 and companies A2 (Appendix are summarizedA), while in Tables Table3 A1and an4 dshow A2 (Appendix the results A), for while the distributed Tables 3 and and 4 show returnedthe results status for of the questionnaires distributed and and returned the return status status of by questionnaires the 12 regions, and respectively. the return status by the 12 regions, respectively. Table 3. Distributed and returned status of questionnaires. Table 3. Distributed and returned status of questionnaires. Questionnaires Section Division DistributionQuestionnaires Returned Used Section Division Total Distribution100 Returned 75 Used 73 Group 1 ForeignTotal Company 20100 1475 1473 GroupGroup 2 1 Joint Foreign Venture Company 20 20 15 14 1514 GroupGroup 3 2 Local Joint Company Venture 60 20 46 15 4415 Group 3 Local Company 60 46 44

Table 4. Returned status of questionnaires by 12 regions. Sustainability 2019, 11, 4613 9 of 22

Table 4. Returned status of questionnaires by 12 regions.

Region Returned Region Returned Tash-Tashkent 12 Nav-Navoi 5 Nam-Namangan 8 Sur-Surkhondarya 1 Sam-Samarkand 9 Nuk-Nukus 4 Buk-Bukhara 9 Kash-Kashkadarya 7 Anj-Andijon 2 Kho-Khorazm 8 Syr-Syrdarya 3 Jiz-Jizzakh 7

The Expert Choice 2000 program, which is considered to be the most accurate implementation of a mathematical analysis algorithm consisting of matrices and vectors of AHP analysis, was used to derive the relative priorities of each factor within the SWOT group. In the data input for pairwise comparison, the numerical mode was used among the three evaluation modes (verbal, graphical, numerical) because it is the most suitable in terms of the eﬃciency of inputting matrix coding data created by the survey results of this study. The distributive mode was used to calculate the weight (priority) based on the eigenvectors, because it is generally applied for weight calculation. The weights for importance analysis were calculated by dividing the L (local) weight, representing the element weight in the independent node in the SWOT, by the G (global) weight, representing the importance of the element reﬂecting the weight of the upper layer in the whole layering model. Table5 shows the number of returned questionnaires for the three questionnaire groups according to the consistency ratio. Table6 summarizes the consistency of the overall SWOT matrix and each SWOT stage for questionnaire responses with a consistency ratio of 0.1 or less.

Table 5. Number of questionnaire responses according to consistency ratio.

CR (Consistency Ratio) Section Division Total Under 0.1 0.1–0.2 Over 0.2 Total 75 73 1 1 Foreign Group 1 14 14 0 0 Company Group 2 Joint Venture 15 15 0 0 Group 3 Local Company 46 44 1 (0.14) 1 (0.55)

Table 6. Results of veriﬁed consistency of integrated data.

Stage 2 Stage 3 Section Overall (4 4 Matrix) (4 4 Matrix) × × Total M1 M2 M3 M4 M5 0.00 (Integrated) 0.00 0.00 0.00 0.00 0.00

Group 1 M1 M2 M3 M4 M5 0.00 (Foreign Company) 0.00 0.00 0.00 0.00 0.00

Group 2 M1 M2 M3 M4 M5 0.01 (Joint Venture) 0.00 0.01 0.01 0.01 0.00

Group 3 M1 M2 M3 M4 M5 0.00 (Local Company) 0.00 0.01 0.01 0.00 0.00

After the relative importances among the SWOT groups were evaluated, experts in Uzbekistan’s textile industry evaluated the importances for the strength and weakness groups in the internal Sustainability 2019, 11, 4613 10 of 22 environment attribute as 0.254 and 0.277, and the importances for the opportunities and threat groups in the external environment attribute as 0.259 and 0.209, respectively, as shown in Figure3. In other Sustainability 2019, 11, x FOR PEER REVIEW 10 of 21 words, we can say that Uzbekistan’s textile industry experts evaluated the importances of the SWOT groups in the following order: (1) complement or reduce internal environment weaknesses; (2) take advantage of of external external environmental environmental opportunities; opportunities; (3) (3) strengthen strengthen and and utilize utilize internal internal strengths; strengths; (4) (4)mitigate mitigate or eliminate or eliminate threats. threats.

Figure 3. RelativeRelative importance importance for SWOT groups.

In the results for the analyses of the priorities for the relative importances (G-weights) of the SWOT factors, thethe W𝑊2 (low(low technicaltechnical level)level)factor factor of of the the weakness weakness group group had had the the highest highest importance importance at at0.12, 0.12, and and the theS3 𝑆(government (government support, support, benefits, benefits, and and incentives) incentives) factor factor of theof the strength strength group group and and the theO4 (favorable𝑂 (favorable conditions conditions for foreignfor foreign investment) investment) factor factor of the of opportunity the opportunity group group both had both the had second the secondhighest highest importance importance at 0.088. at The 0.088.S2 (lowThe 𝑆 utility (low prices utility and prices cheap and raw cheap material) raw material) factor of factor the strength of the strengthgroup and group the Oand1 (development the 𝑂 (development of manufactured of manufactured textile goodstextile insteadgoods instead of cotton of cotton fiber) factorfiber) factor of the ofopportunity the opportunity group bothgroup had both the had third the highest third importancehighest importance at 0.07, whileat 0.07, the whileW3 (imported the 𝑊 (imported material materialis expensive) is expensive) factor and factor the Wand1 (people the 𝑊 are(people undereducated) are undereducated) factor of factor the weakness of the weakness group had group the hadfourth the highest fourth importances highest importances at 0.064 and at 0.063,0.064 respectively.and 0.063, respectively. Finally, the TFinally,2 (growing the 𝑇 competition (growing competitionbecause of new because entrants of new to the entrants industry) to the factor industry of the) factor threat of group the threat had the group sixth had highest the sixth importance. highest Toimportance. summarize, To there summarize, were three there factors were in thethree weakness factors group,in the twoweakness factors grou in thep, strengthtwo factors group, in twothe strengthfactors in group, the opportunity two factors group, in the and opportunity one factor grou in thep, and threat one group factor among in the the threat top group eight factors among with the topa significance eight factors level with greater a significance than 0.06. level In the greater results than of the0.06. analyses In the results of the L-weightsof the analyses for the of SWOTthe L- weightsfactors, Sfor3, W the2, OSWOT4, and factors,T2 were 𝑆 the, 𝑊 most, 𝑂, important and 𝑇 were factors the inmost each important SWOT group factors at 36%,in each 37%, SWOT 34%, groupand 29%, at 36%, respectively. 37%, 34%, Table and7 29%,summarizes respectively. the L-weights Table 7 summarizes (priority of the the L-weights factor within (priority the group), of the factorG-weights within (overall the group), priority G-weights of the factor), (overall and priority ranks for of the each factor), SWOT and factor. ranks for each SWOT factor.

TableTable 7. Weights and ranks for each SWOT factor. L—local; G—global.

Factors L-Weight L-Weight Rank Rank G-Weight G-Weight Rank Factors Factors L-Weight L-Weight Rank Rank G-Weight G-Weight Rank Rank

S𝑆1 0.222 3 0.057 8 𝑊W1 0.2280.228 3 3 0.063 0.063 5 5 S2 0.276 2 0.070 3 W2 0.367 1 0.102 1 𝑆 0.276 2 0.070 3 𝑊 0.367 1 0.102 1 S3 0.346 1 0.088 2 W3 0.232 2 0.064 4 S𝑆4 0.3460.156 1 4 0.088 0.040 132 𝑊W4 0.2320.173 2 4 0.064 0.048 114

O𝑆1 0.1560.270 4 2 0.040 0.070 13 3 𝑊T1 0.1730.246 4 2 0.048 0.051 11 9 O2 0.222 3 0.058 7 T2 0.285 1 0.060 6 𝑂 0.270 2 0.070 3 𝑇 0.246 2 0.051 9 O3 0.168 4 0.044 12 T3 0.235 3 0.049 10 O𝑂4 0.2220.339 3 1 0.058 0.088 27 𝑇T4 0.2850.235 1 3 0.060 0.049 106

𝑂 0.168 4 0.044 12 𝑇 0.235 3 0.049 10

𝑂 0.339 1 0.088 2 𝑇 0.235 3 0.049 10

4.3. Sustainable Development Strategies The results for the L-weight and G-weight for each factor, listed in Table7, suggest that it is necessary to complement weaknesses such as W2, W3, and W1, strengthen strengths such as S3 and S2, utilize opportunistic factors such as O4 and O1, and reduce threat factors such as T2. Based on the results of the SWOT-AHP analysis, we could construct sustainable strategies for the development of the textile industry in Uzbekistan by using the SO strategy for utilizing strengths and opportunities, the ST strategy for using strengths and overcoming threats, the WO strategy for complementing weaknesses and utilizing opportunities, and the WT strategy for complementing weaknesses and overcoming threats, as shown in Table8.

Table 8. Strategic alternatives by SWOT-AHP analysis results.

Internal Environment SW

S1(0.057), S2(0.070) W1(0.063), W2(0.102) External Environment S3(0.088), S4(0.040) W3(0.064), W4(0.048) O (0.070), O (0.058) S (S , S ) + O (O , O ) W (W , W , W ) + O (O , O ) O 1 2 2 3 2 2 4 1 3 2 3 1 2 4 1 O3(0.044), O4(0.088) SO Strategy WO Strategy T (0.051), T (0.060) ST Strategy WT Strategy T 1 2 T3(0.049), T4(0.049) S2(S3, S2) + T1(T2) W3(W2, W3, W1) + T1(T2)

Table9 shows the development strategies according to the SO, ST, WO, and WT strategy divisions. In the strength group, S3 and S2 had relatively high importance, and, in the opportunity group, O4 and O1 had relatively high importance. Therefore, it is necessary to utilize the advantages of the Uzbekistan government’s policy support and incentives, as well as cheap raw materials and utilities, for the SO strategy. On the other hand, since Uzbekistan is favorable for investment by foreign companies, and the textile industry is developing from textile production to cotton textile manufacturing, it is necessary for the Uzbekistan government to establish a detailed strategy to capture opportunities for business diversification. In the threat group, T2 had a relatively high importance. Thus, Uzbekistan should be prepared to take advantage of the government’s policy support and incentives, which are the strengths of Uzbekistan’s textile industry, and to utilize cheap raw materials and utilities, while at the same time making concrete plans to prepare for competition in the textile industry due to the continuous increase of new market entrants for the ST strategy. Therefore, establishment of a strategy that can maintain competitive advantage through cost or differentiated quality and service in the textile field is essential. In the weakness group, W2, W3, and W1 had relatively high importance. Therefore, government policy should be emphasized to improve the low technology level, the low-income raw material, and the low education level of people for the WO strategy. As mentioned of the SO and ST strategies, it is necessary to improve the weaknesses and to face the external environmental situation with emphasis on the cotton production business mainly based on raw material cultivation. Thus, concrete and detailed diversification strategies should be developed. The Uzbekistan textile industry should actively pursue joint ventures with foreign companies wishing to make foreign direct investment (FDI) or strategic alliances in the technology sector and, through this, eliminate weaknesses, while maintaining and utilizing the opportunity factors. Finally, the WT strategy is to complement W2, W3, and W1, which are the most important weakness factors, and to eliminate T2, which is one of the most importance threat factors. In other words, as mentioned in the WO and ST strategies, the goals should be to improve the low level of technology, the high importation of raw materials and the low education level of people, which are weak points of the Uzbekistan textile industry, and to prepare for intensifying competition within the textile industry. Sustainability 2019, 11, 4613 12 of 22

Table 9. Development strategies according to strategy division.

Division Development Strategies Utilizing the advantages of the Uzbek government’s policy support and • incentives, as well as cheap raw materials and utilities. SO Establishing specific strategies for business diversification in the context of the • textile industry being developed from cotton-oriented to textile manufacturing. A strategy that can maintain competitive advantage through cost or • differentiation advantage is needed. ST A differentiated preparation for competition in the textile industry due to new • market entrants. Actively pursuing joint ventures with foreign companies wishing to make foreign • WO direct investment (FDI) or strategic alliance in the technology sector, and eliminating weaknesses, while maintaining and utilizing the opportunity factors. Improving the low level of technology, high importation of raw materials and low • WT education level of people, which are weak points of Uzbekistan textile industry. Preparing for intensifying competition within the textile industry. •

5. Concluding Remarks Uzbekistan’s textile industry, which is a representative national industry, is pursuing sustainable development policies while constantly evolving and showing higher cotton productivity. In recent years, the Uzbekistan government promoted the development of the textile industry with abundant raw cotton and cotton yarn, as well as cheap labor and infrastructure resources (water, natural gas, electricity, etc.); Uzbekistan has a domestic market with the largest population in Central Asia, and enjoys proximity to the CIS market, which are the most important factors for the attraction of FDI. This study analyzed the importance and priorities of internal and external environmental factors for the establishment and implementation of strategies for the development of the Uzbekistan textile industry based on realistic situation perceptions. The main difference in the findings of this research from the other relevant research was in that it conducted the quantitative examination of the SWOT and provided the preferences of the decision-maker in planning and implementing the development strategies for Uzbekistan. Specifically, we took a look at the SWOT-analysis-based research that was carried out in broadly examining the textile industry in Uzbekistan. Then, a SWOT matrix for an Uzbekistan textile industry development strategy was established by integrating, classifying, and adjusting the SWOT analysis results derived from the previous studies. AHP analysis was utilized to quantify the importances and priorities of the components of the SWOT analysis. On that basis, this research provided concrete, effective, and sustainable strategy directions reflective of rational selection and prioritization within a context of limited resources. This research might be meaningful in suggesting the basis of the establishment of a viable strategy for the development of the textile industry in Uzbekistan. Based on the results of the study, it was possible to construct strategies for the development of the Uzbekistan textile industry from a practical viewpoint. The overall strategy comprised SO strategies to utilize strengths and opportunities, ST strategies to overcome threats and complement weaknesses, WO strategies to take advantage of opportunities, and WT strategies to overcome weaknesses and avoid threats. Further AHP analysis showed that the WO strategy had the highest importance, and suggested accordingly that priority should be given to the WO strategy for the development of Uzbekistan’s textile industry. Based on the SWOT-AHP analysis, we could say that the Uzbek government should pay attention to improving the low level of technology, the high price of imported raw materials, and the workers’ low education level, which are the weak points of the textile industry of Uzbekistan. In addition, the Uzbek government should gradually shift the industrial structure from raw cotton to finished textile exportation, which offers relatively high added economic value. To achieve this, the Sustainability 2019, 11, 4613 13 of 22

Uzbek government needs to promote joint ventures and strategic alliances with foreign companies wishing to enter the textile industry through FDI schemes. The limitations of this study were its examination of various components of SWOT attributes through a literature review. Also, the AHP analysis limited the number of components per attribute to four, taking into account the fact that a greater number of components to be evaluated would make it more difficult to maintain logical consistency of responses. Future research will be more meaningful in analyzing the importances and priorities of the AHP and in further studying, with a structured model, the causal relationships among the key factors impacting the development of Uzbekistan’s textile industry. Future research will be conducted to show how three groups (foreign company, joint venture, local company) of textile companies face difference situations and to discuss what major factors influence each group and how different geographical regions of each company have different strengths, weaknesses, opportunities, and threats.

Author Contributions: All of the authors discussed and proposed the mathematical method, and designed the test plan. Y.-J.K. and J.P. accomplished the computation and wrote the paper. Funding: This research received no external funding. Conﬂicts of Interest: The authors declare no conﬂicts of interest.

Appendix A

Table A1. SWOT analysis results from 2016/2017 Knowledge Sharing Program with Uzbekistan’s Industry and Trade (KOTRA, 2017). CIS—Commonwealth of Independent States; USA—United States of America.

S (Strength) W (Weakness) Production structure focusing on natural fibers, low • Rich materials and cheap labor production of chemical fibers • Low-cost energy sources (electricity, gas, water, etc.) Low technical level (export of cheap • • Domestic consumers (30 million) and access to general-purpose articles) • CIS market Weaknesses in logistics environment (duration, cost) • Duty exemption for raw materials and tax benefits Government-controlled, lack of cooperation • • Private organization implementing textile policies among branches • (Uzbekyengilsanoat) Lack of water and low mechanization rate in • cotton industry O (Opportunity) T (Threat) Expansion of the fast fashion trend Environmental policies and CSR reinforcement in • • Production with buyer compliance advanced countries • Possible growth of CIS market with high potentials Technical subordination by advanced countries • • Entry to the Eurasian Economic Community Mid-to-low price market encroachment from China • • USA’s regulation on Chinese export and Vietnam •

Table A2. SWOT analysis results from 2009/2010 Central Asia Invest Program (2011).

S (Strength) W (Weakness) Restricted access to top quality cotton and high Low cost of labor • • prices charged Low energy cost Outdated technology used for the production of • • Low water cost cotton ﬁber and textiles • Availability of raw materials Relatively high import dependency of • • Tax incentives readymade garments and knitted wear on raw • Custom incentives material, interim goods, and accessories • Cotton price beneﬁts High customs duties for imported fabrics and • • Proximity of a huge CIS market accessories render domestic textile • industry uncompetitive Sustainability 2019, 11, 4613 14 of 22

Table A2. Cont.

O (Opportunity) T (Threat) Uzbekistan offers most favorable conditions to • Problems of being out of step with global absorb foreign investments from • fashion trends countries-leading textile centers Uzbekistan has a lower credit rating than Growing local market • • its competitors Investment project support • Extremely low level of cooperation between The export of manufactured textile goods • • Uzbekistan’s banks and its textile enterprises instead of cotton fibers has a number of benefits • Challenges of real competition in the Textile industry is not a capital but a • • global trade labor-intensive sector, which can ease Lack of adequate water resources employment problems •

Table A3. SWOT analysis results from 2015/2016 Knowledge Sharing Program with Uzbekistan’s Industry and Trade (KDI, 2017).

S (Strength) W (Weakness) A stable source of raw materials • Dominance of primary textile production and low High-quality cotton fiber • • degree of processing raw materials Affordable resource prices including raw cotton, • Technology cheap highly skilled workforce, and low energy and • Lack of qualified administrative personnel and utility costs • experienced managers who understand the specifics Infrastructure (cotton terminals, transport, etc.) • of the production process and are able to manage The presence of a number of large enterprises in the • High import dependence on accessories, equipment regions with a full cycle of production, from yarn • spares, lubricants, and chemicals production to finished products O (Opportunity) T (Threat) The balanced reorientation of domestic raw materials • exports for production of finished products with high added value The possibility of using synthetic materials Potential competitors are Vietnam and Bangladesh • • Potential markets of Central Asia, Russia, Turkey, and The reduction of consumer demand in Uzbekistan’s • • the Baltic states major importing countries of textile products as a The Great Silk Road result of the crisis (Russia, Kazakhstan) • The growth of labor costs in China The high import tariffs of importing countries (except • • Opportunities for foreign investors (incentives and Central Asia) • reduction of inspection and control) A decline in cotton fiber exports and an increase in • processing volume within the country are planned

Table A4. SWOT analysis results from Tursunov (2007). EU—European Union.

S (Strength) W (Weakness) Low-cost and high-quality product • Government support • Weak distribution chain Growing popularity of Uzbek product • • Language barrier Already developed retail chain by many joint ventures • • Existing capabilities are not enough to satisfy Technological compatibility • • market demand Similar requirements for quality • Mentality Production cooperation, and collaboration of • • Weak knowledge of institutional legal aspects of enterprises in the production of goods and services • market access Long-term trade and partnership ties • Underdeveloped stockinet manufacture for Well-developed scheme of forwarding and • • fashion market banking services Free trade regime • Sustainability 2019, 11, 4613 15 of 22

Table A4. Cont.

O (Opportunity) T (Threat) Growing competition • New entrants to the industry • Most countries themselves have well-developed • production and retail systems of various clothing products Growing technical requirements for trade • (especially in EU) Growth in market demand Large share of transport cost • • Growth in population income Growing competition from the countries • • High solvent demand enjoying FTA with duty-free or low-duty export • Development of substitute products • Growing competition from China, India, • and Turkey Countries may start their own manufactures • Existing free trade regime may disappear • Growth in high fashion market with rapid • design change

Appendix B

Table A5. Summarized SWOT factors.

Groups Previous Studies Factors Final Factor of This Study Rich materials and cheap labor Cheap and highly skilled • • Low cost of labor labor cost • Low-cost energy sources • Low water cost • Affordable resource prices including raw cotton, cheap • highly skilled workforce, and low energy and utility costs Low utility prices and cheap Availability of raw materials • • raw materials A stable source of raw materials • High-quality cotton fiber • Affordable prices • Cotton price benefits • Duty exemption for raw materials and tax benefits • Tax incentives Government support, the • • Custom incentives benefits and incentives • Strength Government support • Domestic consumers (30 million) and access to CIS market • Advantages in strategic Proximity to a huge CIS market • • location; huge market Growing popularity of Uzbek products • Well-developed forwarding and banking services schemes • Private organization implementing textile policies • (Uzbekyengilsanoat) • Infrastructure (cotton terminals, transport, etc.) • The presence of a number of large enterprises in the • regions with a full cycle of production, from yarn Others production to finished products • Already-developed retail chains by many joint ventures • Similar requirements for quality production cooperation, • and collaboration of enterprises in the production of goods and services Long-term trade and partnership ties • Sustainability 2019, 11, 4613 16 of 22

Table A5. Cont.

Groups Previous Studies Factors Final Factor of This Study Lack of qualified administrative personnel and • experienced managers who understand the specifics of the production process and are able to manage People are undereducated Language barrier • • Weak knowledge of institutional legal aspects of market • Access • Technology • Outdated technology used for the production of cotton • fiber and textiles Low technical level (exportation of cheap • general-purpose articles) Low technical level • Production structure focusing on natural fibers, low • production of chemical fibers Dominance of primary textile production and low degree • of processing of raw materials High import dependence on accessories, equipment spares, Weaknesses • lubricants, and chemicals High customs duties for imported fabrics and accessories • Imported materials render domestic textile industry uncompetitive • are expensive Relatively high import dependency of readymade • garments and knitted wear on raw material, interim goods and accessories

Weaknesses in logistics environment (duration, cost) Weaknesses in • • Weak distribution chain logistics environment • Mentality • Underdeveloped stockinet manufacture for fashion market • Weaknesses in logistics environment (duration, cost) • Government-controlled, lack of cooperation • among branches Others • Lack of water and low mechanization rate in • cotton industry Restricted access to top-quality cotton and high prices that • are charged The balanced reorientation of domestic raw material • exports for production of finished products with high added value Development of • The exportation of manufactured textile goods instead of manufactured textile goods • cotton fibers has a number of benefits instead of cotton fiber A decline in cotton fiber exports and an increase in • processing volume within the country are planned Potential markets of Central Asia, Russia, Turkey, and the • Baltic states Possible growth of • Possible growth of CIS market with high potentials foreign market • Opportunity Entry to the Eurasian Economic Community • Expansion of new fashion trends • Expansion of new Growth in market demand • • fashion trend Production with buyer compliance • Uzbekistan offers most favorable conditions for absorption • of foreign investments from leading textile centers. Investment project support Favorable conditions for • • Opportunities for foreign investors (incentives and foreign investments • reduction of inspection and control) Free trade regime • Sustainability 2019, 11, 4613 17 of 22

Table A5. Cont.

Groups Previous Studies Factors Final Factor of This Study High solvent demand • The growth of labor costs in China • Textile industry is not a capital but a labor-intensive sector, • which can ease employment problems Opportunity Others USA’s regulations on Chinese exports • • The possibility of using synthetic materials • The Great Silk Road • Growing local market • Problems of being out of step with global fashion trends Fashion market with rapid • • Growth in high fashion market with rapid design change design change • Challenges of real competition in global trade • Potential competitors are Vietnam and Bangladesh • Growing competition Growing competition • • New entrants to the industry because of new entrants to • Growing competition from countries enjoying FTA with the industry • duty-free or low-duty exports Growing competition from China, India, and Turkey • The reduction of consumer demand in Uzbekistan’s major • textile-product-importing countries as a result of crisis Reduction of Uzbekistan’s • (Russia, Kazakhstan) major importing countries of Most countries themselves have well-developed textile products • production and retail systems for various clothing products Threat Growing technical requirements for trade (especially in EU) • Environmental policies and CSR reinforcement in Growing requirement for • • advanced countries trade in advanced countries Technical subordination by advanced countries • Mid-to-low-price market encroachment from China • and Vietnam Uzbekistan has a lower credit rating than its competitors • Countries may start their own manufactures • Extremely low level of cooperation between Uzbekistan’s • banks and its textile enterprises Others Lack of adequate water resources • • Existing free trade regimes may disappear • The high import tariﬀs of importing countries (except • Central Asia) Large share of transport cost • Development of substitute products •

Appendix C

Table A6. Consistency test results by Expert Choice 2000.

Stage 2 Stage 3 Section * Responder’s Name Overall M1 M2 M3 M4 M5 1 (F) Namatov Ravshan 0.06 0.03 0.22 0.03 0.06 0.05 2 (F) B. Tulaganov 0.06 0.03 0.05 0.05 0.18 0.02 3 (F) Kayumov Davron 0.00 0.00 0.00 0.00 0.00 0.00 4 (F) Takhividov Rafael 0.04 0.05 0.06 0.11 0.01 0.02 5 (F) Akbarov Habibullo 0.01 0.00 0.05 0.06 0.00 0.06 6 (F) Kastamirova Emma 0.00 0.00 0.00 0.00 0.00 0.00 7 (F) Ismailov Nemat 0.04 0.04 0.03 0.02 0.05 0.02 Sustainability 2019, 11, 4613 18 of 22

Table A6. Cont.

Stage 2 Stage 3 Section * Responder’s Name Overall M1 M2 M3 M4 M5 8 (F) Turaev Yokub 0.04 0.00 0.07 0.22 0.06 0.07 9 (F) Vafoev Sanjar 0.06 0.04 0.12 0.08 0.12 0.06 10 (F) Sulaymonov Ijod 0.00 0.00 0.00 0.00 0.00 0.00 11 (F) Bobojonov Ravshan 0.07 0.07 0.10 0.05 0.08 0.04 12 (F) Kubonov Shukhrat 0.06 0.03 0.06 0.14 0.12 0.05 13 (F) Yakubov Zafar 0.06 0.00 0.15 0.29 0.07 0.05 14 (F) Abdullayev Valijon 0.04 0.09 0.00 0.00 0.00 0.00 15 (J) Kurbonov Farkhod 0.03 0.03 0.02 0.03 0.02 0.03 16 (J) Barotov Tulkin 0.05 0.04 0.05 0.19 0.02 0.10 17 (J) Xaitov Kobuljon 0.05 0.02 0.05 0.08 0.16 0.08 18 (J) Mamadiev Kamolkhon 0.06 0.05 0.09 0.06 0.05 0.03 19 (J) Tilabov Yorkin 0.05 0.05 0.05 0.15 0.05 0.00 20 (J) Kosimov Mirsharif 0.02 0.01 0.12 0.00 0.03 0.02 21 (J) Hashimov Nodir 0.07 0.10 0.05 0.01 0.05 0.15 22 (J) Siddikov Mumin 0.03 0.02 0.07 0.03 0.12 0.00 23 (J) Rustam Bofoyev 0.10 0.04 0.19 0.03 0.13 0.08 24 (J) Jalilov Shavkat 0.04 0.01 0.13 0.07 0.06 0.03 25 (J) Khudoyber Diyev 0.05 0.08 0.01 0.05 0.02 0.02 26 (J) Yunuskhodjaeva R. 0.02 0.02 0.03 0.00 0.02 0.05 27 (J) Pak Ivan 0.00 0.00 0.00 0.00 0.00 0.00 28 (J) YulchiboevTurdali 0.06 0.07 0.11 0.03 0.04 0.02 29 (J) Kamolov Kakhramon 0.07 0.06 0.15 0.08 0.08 0.08 30 (L) Dadamirzaev Z. Sh 0.03 0.01 0.03 0.08 0.06 0.01 31 (L) Soliev Ruslan 0.02 0.00 0.08 0.02 0.05 0.00 32 (L) Abdullaev Khasan 0.09 0.00 0.14 0.08 0.19 0.21 33 (L) Tojiev Oybek 0.03 0.02 0.07 0.05 0.02 0.02 34 (L) Kattakulov Abdumuminov 0.07 0.04 0.10 0.09 0.09 0.01 35 (L) Mukhtarova M. 0.02 0.01 0.01 0.03 0.03 0.03 36 (L) Murodov Sirojiddin 0.07 0.01 0.13 0.07 0.15 0.02 37 (L) Numonov Orif 0.09 0.00 0.23 0.23 0.10 0.07 38 (L) Kuchkarov Ozodbek 0.03 0.02 0.06 0.02 0.07 0.03 39 (L) Baramov Akbarkhon 0.05 0.02 0.14 0.05 0.02 0.35 40 (L) Dadagonov Shokir 0.06 0.03 0.11 0.14 0.00 0.07 41 (L) Riskiev Abrorbek 0.07 0.03 0.03 0.09 0.05 0.15 42 (L) Kudratov Begzod 0.07 0.10 0.05 0.03 0.04 0.08 43 (L) Shamsutdinov Shukhrat 0.04 0.05 0.02 0.02 0.04 0.03 44 (L) Hashimov Abdullo 0.08 0.06 0.34 0.13 0.02 0.03 45 (L) Farmonov Murodali 0.08 0.04 0.18 0.02 0.02 0.05 46 (L) Isanboyev A. B. 0.10 0.08 0.06 0.23 0.02 0.08 Sustainability 2019, 11, 4613 19 of 22

Table A6. Cont.

Stage 2 Stage 3 Section * Responder’s Name Overall M1 M2 M3 M4 M5 47 (L) Turaev Durbek 0.03 0.03 0.08 0.02 0.00 0.01 48 (L) Rahmanova Malokhat 0.04 0.00 0.07 0.17 0.00 0.08 49 (L) Yuldashev Khasankhon 0.05 0.02 0.04 0.08 0.18 0.00 50 (L) Vakhobov B. Sh. 0.02 0.01 0.04 0.05 0.03 0.00 51 (L) Babanov Isroil 0.04 0.00 0.08 0.05 0.07 0.18 52 (L) Khalimov Mirshod 0.05 0.02 0.06 0.06 0.03 0.39 53 (L) Hamamov Shukhrat 0.00 0.00 0.00 0.00 0.00 0.00 54 (L) Jabborov Sanjar 0.06 0.02 0.12 0.00 0.06 0.06 55 (L) Tangiboev Furkhat 0.06 0.08 0.03 0.06 0.04 0.00 56 (L) Kholnazzrov Sh. K. 0.04 0.02 0.05 0.06 0.08 0.05 57 (L) Azizov G’ulomjon 0.04 0.05 0.03 0.09 0.02 0.00 58 (L) Saidmuradov B. 0.07 0.12 0.02 0.02 0.02 0.02 59 (L) Nuraliyev Ganibek 0.06 0.02 0.08 0.13 0.09 0.11 60 (L) Zuxurov Jahongir 0.05 0.06 0.05 0.02 0.05 0.06 61 (L) Nazarov K. A. 0.00 0.00 0.00 0.00 0.00 0.00 62 (L) Msharipov Egambergan 0.07 0.01 0.58 0.06 0.02 0.03 63 (L) Suliev Kobiljon 0.55 0.62 0.72 0.81 0.02 0.04 64 (L) Bakhodir Akhmedov 0.14 0.00 0.16 1.39 0.19 0.16 65 (L) Buranov S. B. 0.03 0.03 0.02 0.04 0.03 0.02 66 (L) Sadirov Otabbek 0.03 0.01 0.01 0.03 0.21 0.07 67 (L) Z. Baratov 0.03 0.00 0.13 0.13 0.08 0.05 68 (L) Tohirov Zohidjon 0.05 0.03 0.06 0.24 0.05 0.03 69 (L) Saﬁn Radik 0.03 0.02 0.03 0.05 0.05 0.00 70 (L) Eshmirzayev Sunnatbek 0.05 0.00 0.00 1.17 0.00 0.00 71 (L) Boltayev Komiljon 0.00 0.00 0.00 0.00 0.06 0.01 72 (L) Ulasev Hushmurov 0.03 0.00 0.07 0.08 0.03 0.03 73 (L) Valiyev A. 0.03 0.01 0.08 0.07 0.03 0.04 74 (L) Amryev Azamat 0.10 0.09 0.14 0.08 0.13 0.13 75 (L) Sokhibov Boburbek 0.01 0.00 0.02 0.00 0.01 0.00 * F: foreign company, J: joint venture, L: local company.

Table A7. The classiﬁcation of textile ﬁrms in Uzbekistan.

No Name of the Company Manufacture 1 NarmatovRavshan: Manager of “OS BORN Textile” All kinds of textile products 2 Dadamirzaev Z. Sh.: Manager of “TantexIplik” Cotton yarn 3 KurbonovFarkhod: Manager of “Nafosat Textile” Textile products 4 BarotovTulkin: Manager of “ToshbulokTeks” Cotton yarn 5 SolievRuslan: Manager of “Nus- Man Number One Production” Cotton ﬁber 6 XaitovKobuljon: Manager of “Beruniy Textile Invest” Cotton yarn Sustainability 2019, 11, 4613 20 of 22

Table A7. Cont.

No Name of the Company Manufacture 7 AbdullaevKhasan: Manager of “Maxim Gold Tex” Cotton yarn 8 TojievOybek: Manager of “Jasmin Textile Plus” Cotton yarn, textile products 9 B.Tulaganov: Manager of “Orianna Yarns Textile ” Cotton yarn and dying 10 KattakulovAbdumuminov: Manager of “Nukus Textile” Cotton yarn 11 KayumovDavron: Manager of “Baraka Teks” Cotton yarn 12 MamadievKamolkhon: Manager of “Norinteks” Cotton yarn 13 Takhividov Rafael: Manager of “Shovot Textile” Cotton yarn, fabric 14 Mukhtarova.M: Manager of “FartunaTextil” Cotton fabric, yarn, dying 15 TilabovYorkin: Manager of “Forij Textile Group” Cotton fabric 16 MurodovSirojiddin: Manager of “MurodovRahmatulla” Cotton recycling, raw cotton 17 KosimovMirsharif: Manager of “Textiles SpektrumKolors” Cotton fabric and dying 18 AkbarovHabibullo: Manager of “Mega Textile” Cotton yarn 19 NumonovOrif: Manager of “Ziyokortekstil Carpet 20 Kastamirova Emma: Manager of “Artek International” Cotton yarn 21 KuchkarovOzodbek: Manager of “Grand Tash Tex” Cotton yarn, cotton ﬁber 22 HashimovNodir: Manager of “MedexTextil” Cotton yarn, ﬁber 23 IsmailovNemat: Manager of “MRT Textile” Cotton yarn 24 SiddikovMumin: Manager of “JizzaxKenteks” Cotton yarn 25 BaramovAkbarkhon: Manager of “Bukhara Cotton Textile” Cotton fabric, cotton yarn 26 DadagonovShokir: Manager of “Asaka Cotton Impex” Hydroscopic cotton 27 RiskievAbrorbek: Manager at “Nam Teks” Cotton yarn 28 KudratovBegzod: Manager of “Osiyo Invest Mato” Cotton yarn, ready clothes 29 ShamsutdinovShukhrat: Manager of “Samarkand BaxtTekstil” Textile yarn, textile fabric 30 HashimovAbdullo: Manager of “Mega Line Textile” Ready textile products 31 FarmonovMurodali: Manager of “Murodali Farm Textile” Unweave cotton fabric, Yarn 32 Isanboyev A.B: Manager of “JizzaxSanoatTeks” Cotton yarn 33 TuraevYokub: Manager of “Asia Silk” Silk products 34 VafoevSanjar: Manager of “AmudaryoTeks” Cotton yarn 35 TuraevDurbek: Manager of “KogonNurTeks” Cotton fabric 36 RahmanovaMalokhat: Manager of “Edem Textile” Cotton fabric 37 YuldashevKhasankhon: Manager of “TukimachiSanoatTekstil” Cotton fabric 38 VakhobovB.Sh: Manager of “Caravan Tex Trade” Unweave cotton fabric 39 BabanovIsroil: Manager of “UniversialTarakiyotTekstil” Cotton yarn 40 KhalimovMirshod: Manager of “TolaIpakTekstil” Cotton fabric 41 HamdamovShukhrat: Manager of “Sam RafoatTekstil” Ready cotton fabric 42 JabborovSanjar: Manager of “Ok Saroytekstil” Cotton yarn 43 SulaymonovIjod: Manager of “Doka Teks” Cotton yarn 44 TangiboevFurkhat: Manager of “Tuytepa Textile” Cotton yarn 45 RustamBofoyev: Manager of “Azrus-Textile” carpets Sustainability 2019, 11, 4613 21 of 22

Table A7. Cont.

No Name of the Company Manufacture 46 Kholnazzrov.Sh.K: Manager of “Ishonch carpet” carpets 47 AzizovG’ulomjon: Manager of “NamimpeksTekstil” Cotton yarn 48 JalilovShavkat: Manager of “MiliGuliston Textile” Cotton yarn 49 Saidmuradov. B: Manager of “Khiva Tex” Cotton fabric 50 NuraliyevGanibek: Manager of “HayotbekTekstil” Cotton yarn 51 ZuxurovJahongir: Manager of “Jizzakh Industrial Tukima” Cotton yarn 52 Khudoyberdiyev Sobir: Manager of “Ark EkoTekistil” Cotton yarn 53 BobojonovRavshan: Manager of “Cotton Road” Cotton yarn, cotton fabric 54 Nazarov K. A.: Manager of “MavlyudaTextil Invest” Ready velvet products 55 MasharipovEgambergan: Manager of “Khorazm Carpets” Cotton yarn, carpets 56 SulievKobiljon: Manager of “Viksot-Impeks” Cotton yarn 57 BakhodirAkhmedov: Manager of “UrganchBakhmal” Cotton fabric 58 Yunuskhodjaeva R.: Manager of “YA Textile Group” Cotton fabric, textile clothes 59 Pak Ivan: Manager of “SurkhonTeks” Cotton yarn, knit fabric, satin 60 Buranov S. B.: Manager of “Baht Invest HamkorTex” Cotton fabric 61 SadirovOtabek: Manager of “Modern Textile Industry” Weaved cotton yarn 62 Z. Baratov: Manager of “Siyovush Textile Bukhoro” Cotton fabric 63 KurbonovShukhrat: Manager of “Karay Textile” Cotton yarn 64 TohirovZohidjon: Manager of “MirobodTekstil” Cotton fabric 65 Saﬁn Radik: Manager of “Chinoz Textile” Cotton yarn 66 Yakubov Zafar: Manager of “ElitStandartteks” Coarse calico 67 YulchiboevTurdali: Manager of “Marhamatteks” Cotton yarn 68 AbdullayevValijon: Manager of “Fan Tekstil” Cotton yarn 69 EshmirzayevSunnatbek: Manager of “Bright Navoi Textile” Cotton yarn 70 BoltayevKomiljon: Manager of “BukhoroTexnoTeks” Cotton fabric 71 UlashevHushmurov: Manager of “Kamashi XBK” Cotton yarn 72 Valiyev A.: Manager of “KoboTeks” Cotton yarn 73 KamolovKakhramon: Manager of “Jizzakh Textile” Cotton yarn 74 Amriyev Azamat: Manager of “Uz Prom Textile” Cotton fabric 75 SokhibovBoburbek: Manager of “KitobIpYigiruv” Cotton yarn

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